CESC net profit rises by 19%

The company had posted a PAT of Rs 114 cr in the same period last fiscal

The RP-Sanjiv Goenka Group flagship company CESC has posted a 19.3 per cent rise in net profit at Rs 136 crore for the quarter ended September, compared with a net profit of Rs 114 crore during the corresponding period last year.

Net sales during the quarter rose 14.5 per cent to Rs 1,324 crore, against Rs 1,156 crore in the year-ago period.

“Compared to the previous quarter, units sold in the second quarter were higher by two per cent. In the last five years, real growth in tariff is modest, considering the rising coal prices,” said Sanjiv Goenka, chairman, RP-Sanjiv Goenka Group.

Foray into Africa
The company has forayed into the distribution sector in Africa. A consortium in which CESC was a technical partner was the successful bidder for majority stake in one of the 11 state-run distribution companies in Nigeria. “We had participated in the bid for two discoms---Port Harcout and Ikeja---through a consortium comprising Nigerian partners and some private equity firms…we turned out to be the successful bidder for Port Harcout. We will be the technological partner in the consortium,” said Goenka.

Though there would be no investment commitments, CESC has an option to invest up to six per cent in the distribution company, through a special purpose vehicle. Port Harcout’s annual turnover is $180 million and its distribution area is spread across 48,000 sq km.

According to reports, the Nigerian government is undertaking a privatisation programme, which involves selling stakes in four thermal generation plants, three hydro power plants and 11 distribution companies. All these companies were carved out of the Power Holding Company of Nigeria.

Goenka said the company was considering acquisitions in the distribution sector, adding one such move was likely in a month. He, however, didn’t divulge the details.

CESC is India’s third-largest power utility, with an installed generating capacity of 1,225 Mw.

Spencer’s mulls IPO
Spencer’s, the group’s retail business firm, is considering an initial public offering (IPO) next year. “We are considering various options for Spencer’s and are in talks with merchant bankers. One of the options on our radar is an IPO. Creation of a mirror-image company and bringing in strategic investors are also being considered,” Goenka said.

It is expected Spencer’s would break even in four quarters. The firm has 200 stores and trading area of about 9,00,000 sq ft across 45 cities.